U.S. SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                     Form 10-QSB

(Mark One)

[x]  Quarterly Report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934

     For the quarterly period ended March 31, 2001
--------------------------------------------------------------------------

[ ]  Transition Report under Section 13 or 15(d)of the Exchange Act For the
     Transition Period from ________  to  ___________
--------------------------------------------------------------------------

                     Commission file number: 333-53516

                           MERCADO INDUSTRIES, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

      Nevada                                                76-0639842
-------------------------------                         ------------------
(State or other jurisdiction of                          (IRS Employer
incorporation  or  organization)                        Identification No.)

    14601 Bellaire Blvd. Suite 338, Houston, TX                   77083
------------------------------------------------------          ---------
    (Address of principal executive offices)                    (Zip Code)

                                 (281) 564-6418
                             ----------------------
                           (Issuer's telephone number)

-------------------------------------------------------------------------

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                          Yes [ ]     No [X]

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDING DURING THE PRECEDING FIVE YEARS

Check whether the  Registrant  filed all  documents  and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.

                                         Yes [ ]     No [ ]

                APPLICABLE ONLY TO CORPORATE ISSUERS

                                    1

<PAGE>

The Registrant has 20,000,000 Common Stock, authorized, 2,000,000 shares
of Common stock issued and outstanding, par value $0.001 per share as of
March 31, 2001.  Preferred Stock, $0.001 par value per share, 5,000,000
shares authorized, no Preferred Stock issued nor outstanding as of
March 31, 2001.

Traditional Small Business Disclosure Format (check one)

                                        Yes [  ] No [X]


                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements.................................   3
          CPA Review Letter....................................   4
          Balance Sheet (unaudited)............................   5
          Statements of Operations (unaudited).................   6
          Statements of Cash Flows (unaudited).................   7
          Notes to Financial Statements........................  8-9

Item 2.  Management's Discussion and Analysis of Plan
           of Operation........................................   10


PART II. OTHER INFORMATION

Item 1.   Legal Proceedings....................................   14

Item 2.   Changes in Securities and Use of Proceeds............   14

Item 3.   Defaults upon Senior Securities......................   14

Item 4.   Submission of Matters to a Vote
           of Security Holders.................................   14

Item 5.   Other Information.....................................  14

Item 6.   Exhibits and Reports on Form 8-K......................  14

Signatures......................................................  15


PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS

The unaudited financial statements of registrant for the three
months ended March 31, 2001, follow.  The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.

                                      3


<PAGE>

G. BRAD BECKSTEAD
---------------------------
Certified Public Accountant

                                                      330 E. Warm Springs
                                                     Las Vegas, NV  89119
                                                             702.528.1984
                                                     425.928.2877 (e-fax)


                    INDEPENDENT ACCOUNTANT'S REVIEW REPORT


Board of Directors
Mercado Industries, Inc.
(a Development Stage Company)
Las Vegas, NV

I have reviewed the accompanying balance sheet of Mercado Industries, Inc.
(a Nevada corporation) (a development stage company) as of March 31, 2001
and the related statements of operations for the three-months ended March
31, 2001 and 2000 and for the period March 29, 2000 (Inception) to March 31,
2001, and statements of cash flows for the three-month period ending March
31, 2001 and 2000 and for the period March 29, 2000 (Inception) to March 31,
2001.  These financial statements are the responsibility of the Company's
management.

I conducted my reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole.  Accordingly,
I do not express such an opinion.

Based on my reviews, I am not aware of any material modifications that
should be made to the accompanying financial statements referred to above
for them to be in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 5 to the
financial statements, the Company has had limited operations and has not
commenced planned principal operations.  This raises substantial doubt
about its ability to continue as a going concern.  Management's plans in
regard to these matters are also described in Note 5.  The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.

I have previously audited, in accordance with generally accepted auditing
standards, the balance sheet of Mercado Industries, Inc. (a development
stage company) as of December 31, 2000, and the related statements of
operations, stockholders' equity, and cash flows for the year then ended
(not presented herein) and in my report dated January 10, 2001, I
expressed an unqualified opinion on those financial statements.

May 7, 2001

/s/ G. Brad Beckstead
-------------------------
G. Brad Beckstead, CPA

                                       4

<PAGE>

                             Mercado Industries, Inc.
                         (a Development Stage Company)
                                  Balance Sheet

<TABLE>
<CAPTION>

BALANCE SHEET

                                       (unaudited)
                                         March 31,         December 31,
                                           2001              2000
                                         ----------        -----------
<S>                                      <C>               <C>

Assets

Current assets:
       Cash                              $  1,267           $  504
                                         --------           ------
       Total current assets                 1,267              504
                                         --------           ------
                                         $  1,267           $  504
                                         ========           ======

Liabilities and Stockholders' Equity

Current liabilities:
      Loan from shareholder              $  1,000           $    -
      Other current liability                  85               85
                                         --------           ------
          Total current liabilities         1,085               85


Stockholders' Equity:

Common stock, $0.001 par value, 20,000,000
  shares authorized, 2,000,000 shares
  issued and outstanding                    2,000            2,000
Additional paid-in capital                      -                -
Deficit accumulated during
  development stage                        (1,818)          (1,581)
                                           -------         --------
                                              182              419
                                           -------         -------
                                         $  1,267          $   504
                                         =========         =======

</TABLE>

 The Accompanying Notes are an Intregal Part of These Financial Statements.


                                   5
<PAGE>

                            Mercado Industries, Inc.
                        (a Development Stage Company)
                           Statement of Operations
                                 (unaudited)
             For the Three Months Ending March 31, 2001 and 2000
         and For the Period March 29, 2000 (Inception) to March 31, 2001

<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS

                                         Three Months Ending  March 29, 2000
                                               March 31,      (Inception) to
                                         -------------------    March 31,
                                             2001      2000       2001
                                         ----------  -------   -------------
<S>                                          <C>        <C>       <C>

Revenue                                      $       -  $       - $       -
                                             ---------  --------- ---------

Expenses:
      General and administrative expenses          237          -     1,818
             Total expenses                        237          -     1,818
                                             ---------  --------- ---------


Net (loss)                                   $   (237)  $       - $ (1,818)
                                             =========  ========= =========

Weighted average number of
      common shares outstanding              2,000,000  2,000,000 2,000,000
                                             =========  ========= =========


Net (loss) per share                         $   (0.00) $       - $  (0.00)
                                             =========  ========= =========

</TABLE>

 The Accompanying Notes are an Intregal Part of These Financial Statements.



                                      6
<PAGE>

                            Mercado Industries, Inc.
                        (a Development Stage Company)
                           Statement of Cash Flows
                                 (unaudited)
             For the Three Months Ending March 31, 2001 and 2000
         and For the Period March 29, 2000 (Inception) to March 31, 2001

<TABLE>
<CAPTION>

STATEMENT OF CASH FLOWS


                                         Three Months Ending  March 29, 2000
                                            March 31,         (Inception) to
                                         -------------------    March 31,
                                             2001      2000       2001
                                         ----------  -------   -------------
<S>                                          <C>        <C>        <C>

Cash flows from operating activities

Net (loss)                                   $ (237)    $    -     $(1,818)

Adjustments to reconcile net (loss) to
net cash (used) by operating activities
Increase in other current liabilities              -         -          85
                                             -------    ------     --------
Net cash (used) by operating activities      $ (237)    $    -     $(1,733)
                                             -------    ------     --------

Cash flows from investing activities
Net cash used by investing activities              -          -           -
                                             -------    -------    --------

Cash flows from financing activities
      Issuance of common stock                     -      2,000       2,000
      Loan from shareholder                    1,000          -       1,000
                                             -------    -------    --------
Net cash provided by financing activities      1,000      2,000       3,000
                                             -------    -------    --------
Net (decrease) increase in cash              $   763    $ 2,000    $  1,267
Cash - beginning                                 504          -           -
                                             -------    -------    --------
Cash - ending                                 $1,267    $ 2,000    $  1,267
                                             =======    =======    ========
Supplemental disclosures:
      Interest paid                          $     -    $     -    $      -
                                             =======    =======    ========
      Income taxes paid                      $     -    $     -    $      -
                                             =======    =======    ========

</TABLE>


 The Accompanying Notes are an Intregal Part of These Financial Statements.



                                      7
<PAGE>


                        Mercado Industries, Inc.
                     (A Development Stage Company)
                              Footnotes


Note 1 - History and organization of the company

The Company was organized March 29, 2000 (Date of Inception) under the
laws of the State of Nevada.  The Company has no operations and in
accordance with SFAS #7, the Company is considered a development stage
company.  The Company is authorized to issue 20,000,000 shares of $0.001
par value common stock and 5,000,000 of its $0.001 par value common stock.

Note 2 - Summary of significant accounting policies

Accounting policies and procedures have not been determined except as
follows:

1.  The Company uses the accrual method of accounting.

2.  The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period.  Actual results could differ significantly
from those estimates.

3.  The Company maintains a cash balance in a non-interest-bearing bank
that currently does not exceed federally insured limits.  For the purpose
of the statements of cash flows, all highly liquid investments with the
maturity of three months or less are considered to be cash equivalents.
The Company deposited $500 with Southwest Escrow to open an escrow account.
Southwest Escrow will serve as escrow agent for future fund raisings.

4.  Earnings per share (EPS) is computed using the weighted average number
of shares of common stock outstanding during the period.  Diluted EPS is
computed by dividing net income by the weighted average shares outstanding,
assuming all dilutive potential common shares were issued.  Since the
Company has no common shares that are potentially issuable, such as stock
options, convertible preferred stock and warrants, basic and diluted EPS
are the same.  The Company had no dilutive common stock equivalents such
as stock options as of March 31, 2001.

5.  The Company has not yet adopted any policy regarding payment of
dividends.  No dividends have been paid since inception.

6.  The Company will review its need for a provision for federal income
tax after each operating quarter and each period for which a statement of
operations is issued.

7.  The Company has adopted December 31 as its fiscal year end.

Note 3 - Income taxes

Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109
(SFAS #109) "Accounting for Income Taxes".  A deferred tax asset or
liability is recorded for all temporary differences between financial
and tax reporting.  Deferred tax expenses (benefit) results from the net
change during the year of deferred tax assets and liabilities.

There is no provision for income taxes for the year ended March 31, 2001,
due to the net loss and no state income tax in Nevada.


                                     8
<PAGE>

                         Mercado Industries, Inc.
                      (A Development Stage Company)
                                Footnotes
                             March 31, 2001



Note 4 - Stockholders' Equity

The Company is authorized to issue 20,000,000 shares of its $0.001 par
value common stock and 5,000,000 shares of its $0.001 par value preferred
stock.

On March 14, 2000, the Company issued 2,000,000 shares of its $.001 par
value common stock for cash of $2,000.

There have been no other issuances of common or preferred stock.

Note 5 - Going concern

The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business.  However, the Company has not commenced
its planned principal operations.  Without realization of additional
capital, it would be unlikely for the Company to continue as a going
concern.

Note 6 - Related party transactions

The Company does not lease or rent any property.  Office services are
provided without charge by a director.  Such costs are immaterial to
the financial statements and, accordingly, have not been reflected
therein.  The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other
business opportunities.  If a specific business opportunity becomes
available, such persons may face a conflict in selecting between the
Company and their other business interests.  The Company has not
formulated a policy for the resolution of such conflicts.

Note 7 - Warrants and options

There are no warrants or options outstanding to acquire any additional
shares of common stock.

                                      9
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

The current core business of Mercado Industries, Inc. is to develop a
Internet Website that is aimed at drawing consumers who wish to make their
own travel arrangements for the lower fares that go along with self-booked
reservations.  This site is linked to an already operational website called
www.mercadoindustries.com that is set up to facilitate these arrangements.

Mercadoindustries.com is a simple, usable and complete do-it-yourself
travel site on the Internet.  It offers travel value in all-inclusive
travel at any price for both leisure and business travelers.
MercadoIndustries.com has a unique "10 clicks or less" that it will
outperform any other online travel site in providing the quickest,
easiest and most convenient way to configure and book any air, lodging
and auto rental package to top destinations in the U.S.

Mercado's major expense will lie in providing the revenues necessary to
purchase listings with major Internet search engines who will funnel clients
to the Mercado website when those clients request low-cost fares, room rates
and vehicle rentals for travel.  The major purpose of this offering is to
generate the revenues necessary to set up the relationships with the search
engines.  As in the world of print advertising, the more you pay, the greater
the reach; though on the Internet, it is not column inches you buy with the
extra dollars, but prioritized placement of the Company's  website's listing
in response to customer requests for discounted travel providers.

Going Concern - The Company experienced operating losses for the period
ended March 31, 2001.  The financial statements have been prepared
assuming the Company will continue to operate as a going concern which
contemplates the realization of assets and the settlement of
liabilities in the normal course of business.  No adjustment has been
made to the recorded amount of assets or the recorded amount or
classification of liabilities which  would be required if the Company
were unable to continue its operations.  As discussed in Note 5, of
the notes to the financial statements, management believes it has
enough funds to operate for the next twelve (12) months without the
need to raise additional capital to meet its obligations in the normal
course of business.

Unclassified Balance Sheet - In accordance with the provisions of SFAS
No. 53, the Company has elected to present an unclassified balance sheet.

                                       10

<PAGE>

Loss Per Share - The Company adopted the provisions of Statement
Of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" that established standards for the computation, presentation
and disclosure of earnings per share ("EPS"), replacing the
presentation of Primary EPS with a presentation of Basic EPS.  It also
requires dual presentation of Basic EPS and Diluted EPS on the face of
the income statement for entities with complex capital structures.
The Company did not present Diluted EPS since it has a simple capital
structure.

The Company has not pursued or explored any opportunities for an
acquisition or merger. This does not preclude that the Company may not
explore any opportunities in the future.


Results of Operations
---------------------

As a development stage Company, the Company has yet to generate any revenues.
In addition, the Company does not expect to generate any revenues over the
next approximately to twelve (12) to eighteen (18) months.  During quarter
ended March 31, 2001, the Company had no revenues and $237 in general and
administrative expenses.

Plan of Operation
-----------------

Management does believe that the Company will be able to generate some
revenues during the coming year, management does not believe the
company will generate any profit until sometime in Calendar Year 2000,
as developmental and marketing costs will most likely exceed any
anticipated revenues.

As stated earlier in this filing, the Company believes it has enough
monies to sustain itself for the next twelve months, during this
developmental process.

                                     11
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company is authorized to issue 20,000,000 shares of its $0.001 par
value common stock and 5,000,000 shares of its $0.001 par value preferred
stock.

On March 14, 2000, the Company issued 2,000,000 shares of its $.001 par
value common stock for cash of $2,000.

On January 11, 2001, the Company filed with the U. S. Securities and
Exchange Commission for their review and approval a SB-2 Registration to
further capitalize the Company by offering for sale 3,000,000 shares of
common stock, at a purchase price of $0.025 per share.  The completion
of this offering would further capitalize the Company by $75,000, less
$6,000 in offering costs for a net to the Company of $69,000.  Without
this funding, the Company will be unable to move its business plan further.

See Financial Note 5, which states: "Without realization of additional
capital, it would be unlikely for the Company to continue as a going
concern."

The Company currently has 2 employees who are both officers and
directors of the Company.  These employees received no compensation
through March 31, 2001.  The Company does not plan to hire any
additional employees until it can become an profitable entity.  (See
employment agreements in 10-SB12G).

The Company has no material commitments for capital expenditures nor
does it foresee the need for such expenditures over the next year.

Market For Company's Common Stock
---------------------------------

The common stock of the Company is currently not traded on the NASDAQ OTC
Bulletin Board or any other formal or national securities exchange.  There
is no trading market for the Company's Common Stock at present and there has
been no trading market to date.

There is currently no Common Stock which is subject to outstanding options
or warrants to purchase, or securities convertible into, the Company's
common stock.

Dividend Policy

The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.



                                        12
<PAGE>

Forward-Looking Statements
--------------------------

This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended.  All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements.  These statements are based on certain assumptions and analyses
made by the Company in light of its experience and its perception of
historical trends, current conditions and expected future developments as well
as other factors it believes are appropriate in the circumstances.  However,
whether actual results or developments will conform with the Company's
expectations and predictions is subject to a number of risks and uncertainties,
general economic market and business conditions; the business opportunities
(or lack thereof) that may be presented to and pursued by the Company; changes
in laws or regulation; and other factors, most of which are beyond the control
of the Company.

This Form10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; (iii) the Internet and Internet commerce; and, (iv) the Company's
financing plans.  Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors.  Factors that could adversely affect actual results and performance
include, among others, the Company's limited operating history, dependence
on continued growth in the use of the Internet, the Company's inexperience
with the Internet, potential fluctuations in quarterly operating results and
expenses, security risks of transmitting information over the Internet,
government regulation, technological change and competition.

Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary  statements and there can be no assurance
that the actual results or  developments  anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations.  The
Company assumes no obligations to update any such forward-looking statements.


                                    13
<PAGE>

                       PART II OTHER INFORMATION

ITEM 1.  Legal Proceedings

The Company is not a party to any legal proceedings.

ITEM 2.  Changes in Securities and Use of Proceeds

None.

ITEM 3.  Defaults upon Senior Securities

None.

ITEM 4.  Submission of Matters to a Vote of Security Holders

During the quarter ended March 31, 2001, no matters were submitted to
the Company's security holders.

ITEM 5.  Other Information

None.

ITEM 6.  Exhibits and Reports on Form 8-K

  3     Articles of Incorporation & By-Laws

               (a)Articles of Incorporation of the Company filed March
               29, 2000.  Incorporated by reference to the exhibits to
               the Company's General Form For Registration Of Securities
               Of Small Business Issuers on Form SB-2, previously filed
               with the Commission on January 11, 2001.

               (b)By-Laws of the Company adopted March 29, 2000.
               Incorporated by reference to the exhibits to the Company's
               General Form For Registration Of Securities Of Small
               Business Issuers on Form SB-2, previously filed with the
               Commission on January 11, 2001.

  13    Annual or Quarterly Reports

               (a) Form 10-KSB for the year ended December 31, 2000.
               Incorporated by reference to the Company's Annual
               Report for Small Business Issuers on Form 10-KSB,
               previously filed with the Commission on ??.

  23    Consent of Experts and Counsel

               Consent of Independent Public Accountant



                                       14


<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                       MERCADO INDUSTRIES, INC.
                                       -----------------------
                                           (Registrant)

Date:  May 11, 2001                    By: /s/ Ruth Selmon
                                       -----------------------
                                               Ruth Selmon
                                               President/
                                               principal executive officer/
                                               principal accounting officer
                                               and sole director


                                        15
<PAGE>